The National Bank of the Republic of Macedonia Council held its third session today.
Press release of the NBRM
The National Bank of the Republic of Macedonia Council held its third session today.
At the today's session, the Council adopted the Decision on credit risk management, the Decision on accounting and regulatory treatment of foreclosed assets and Decision amending the Decision on determining capital adequacy. It is expected that these decisions, adopted after consultations with commercial banks, will improve the assets management in banks' balance sheets.
The banking practice shows that the foreclosed collaterals are often retained in the banks' balance sheets for a long period of time before the bank can sell and transform them into cash. Very often, the foreclosure of collateral, as such, should not be taken as a ground for the bank to recognize income. These assets are retained longer in the banks' balance sheets due to the efforts to be sold at a price which is approximately equal to the amount of outstanding claim, and which is difficult to accomplish because it is higher than the market price.
These Decisions, though they allow inclusion of appropriate percentage of the value of collateral when allocating the impairment, are expected to help the banks to transform the foreclosed assets into cash, which will facilitate to implement their basic function - intermediation between lends and borrowers in the economy.
It is expected that these decisions will also contribute to the increase of revaluation reserve, which is formed at the foreclosure, as a part of the legally mandated regulatory capital.
The National Bank Council also adopted the Decision on amending the Decision on deposit facilities. According to the present setup, at the regular monthly meetings of the Operational Monetary Policy Committee, the Governor sets the maximum interest rate at the CB bill auctions, and thus, indirectly the interest rates on seven-day deposit facilities, repo auctions and interest rate on overnight credit, which appropriately adjust around the CB bill interest rate. The amendments to the Decision transfer the jurisdiction for determining the deposit facility interest rate from the National Bank Council to the Governor, thus addressing the time discrepancy between changes in the interest rates, given that the sessions of the National Bank Council and the Operational Monetary Policy Committee are held in different periods during the month.
At the today's session, the National Bank Council also adopted the Decision on issuing an approval for providing micropayment services and the Decision on technical standards for providing micropayment services, arising from the need to comply with the Law on Amending the Law on Payment Operations. With these two decisions, the National Bank prescribes the documentation, data, information, and technical standards for providing micropayment services by persons who intend to be intermediaries, in order to provide safe and stable micropayment services.
At the session, the National Bank Council also adopted the Decision on Amending the Decision on the manner and the terms under which residents, which are not authorized banks may open and hold accounts abroad, which resulted from an initiative launched by companies. The amendments to the Decision actually enhance the possibility to open accounts abroad, as approved by the National Bank, when there are inflows of value added tax return based on trading transactions abroad, as well as inflows from overseas out-of-court agreement concluded between stakeholders.
Special novelty in the work of the National Bank is the Decision on the manner, procedure for issuing, form, contents and availability of coins for collection purposes, allowing the National Bank to issue coins for collection purposes with certain motives, specific features and thematic details, thus contributing to the country's further affirmation and enrichment of the numismatic collection of the National Bank.
The Council also considered other matters within its jurisdiction.